International Business and Globalization Study Guide

Comprehensive vocabulary flashcards covering political systems, legal structures, cultural dimensions, regional integration, and globalization concepts from Chapters 1, 2, 3, and 5.

Athenian democracy

A political system that allows all adult citizens to vote directly on matters affecting the community.

Representative democracy

A form of government where citizens elect representatives to serve for a set period.

China

The largest country in the world with a communist economic ideology and the United States' second largest trading partner since 2005.

Socialism

An economic ideology where countries generally have the highest labor union membership and participation rates.

Micropolitical risk

A political risk that affects only a certain industry or set of firms in a country.

Macropolitical risk

A type of political risk that affects all businesses in a given country.

Economic risk

Risk involving concerns that a country's economic problems or mismanagement will negatively impact business.

Afghanistan

Considered the most dangerous country in the world in 2021 according to the textbook.

Common law

The type of legal system followed by the United States.

Contract law

The body of law governing legally enforceable agreements between parties in economic exchange.

Theocratic law

A legal system based on religious teachings.

Patent

A grant providing an inventor the exclusive right to make, use, or sell an invention for a limited time.

Copyright

A type of intellectual property that protects written material from unauthorized use.

Acculturation

The ability of a firm to adjust to a culture different from its own.

Verbal communication

A type of communication referring to the message's actual content.

Infrastructure

A vital component of material culture.

Aesthetics

The element of culture referring to what is perceived as taste and beauty in society.

Reference groups

Groups that are important to individuals.

Individualism vs. collectivism

A dimension identified by Hofstede referring to the worth of a person as compared to the worth of the group.

Specific vs. diffuse

Trompenaars's dimension describing the degree to which a society compartmentalizes roles.

Universalism vs. particularism

Trompenaars's dimension referring to the importance of rules versus relationships.

Master of destiny

A philosophy referring to the idea that workers and companies can influence the future.

Regional integration

Economic and/or political steps, including preferential trade access, taken by member states of a union to increase global competitiveness.

Economic geography

The study of principles governing the efficient spatial allocation of economic resources and the resulting consequences.

USMCA

A trade agreement whose members include Canada, the United States, and Mexico.

ASEAN

The Association of Southeast Asian Nations, established in 1967.

ASEAN Regional Forum (ARF)

A forum established to discuss major security issues in the region.

International business

All commercial transactions, both private and public, between nations of the world.

Trade

The earliest and simplest form of international business.

Mercantilism

A theory of international trade supporting the premise that a nation could only gain from trade if it had a trade surplus.

Trade surplus

Occurs when the value of exports exceeds the value of imports in a country.

Chance

An external shock or development that could drastically change or hasten the course of economic development.

Ad valorem tariff

A tariff assessed as a percentage of the value of an imported item, such as a $2.5\%$ tax on a car.

GATT

One of three major international organizations established at the end of World War II to accelerate trade and economic growth.

Quantitative restrictions

Another term for import quotas.

Domestic content provision

Regulations requiring a certain percentage of the value of imports to be sourced in the country.

Countertrade

An agreement where an exporter commits to import goods or services of corresponding value from that country.

Globalization

The socioeconomic reform process of eliminating trade, investment, cultural, information technology, and political barriers across countries.

Decoupling

A fundamental global shift where developing economies begin to grow based on their own underlying strengths rather than industrialized countries.

International Monetary System (IMS)

The global system of exchange rates and international payments enabling countries and citizens to buy goods and services from each other.

International Development Association (IDA)

A World Bank institution providing long-term, low-interest social sector and infrastructure loans to the poorest members using foreign aid funds.

Adaptive institutions

Government organizations that create strong incentives for private investment and operate under a system of checks and balances.

Antitrust laws

National laws aimed at maintaining competition in all sectors of the economy and preventing monopolistic behavior.

Property rights

Protection enabling buyers and sellers to conduct transactions with a high degree of trust; fundamental to market economies.

Transparency

A concept demonstrated when a person's actions allow others to verify the correctness of a transaction, such as a cashier placing change on a counter.

Digital divide

The perceived economic gap between people with easy access to digital technology and those with very limited or no access.

Digital era

The period of transformation adjusting lifestyles to make the Internet and wireless technologies part of everyday life.

Sustainable development

Economic development that meets the needs of the present generation without compromising the ability of future generations to meet their own.